Category Archives: Sustainability

The Take away – The most important variable in energy consumption and carbon dioxide production in food is in your hands – the way you cook your food is the major leverage point in the total food production-consumption system – are you cooking with the lid on the pot?

The Background – The Rise of Global food supply chains has people concerned that this is reducing sustainability and accelerating global warming by increasing carbon dioxide emissions and energy consumption

With the rise of globalisation it is no surprise that food production has been globalising too. Examples such as Salmon farmed in Canada and flown to China for processing before being flown to California have many people interested in sustainability and global warming up in arms.

One response to this concern, that globalisation of the food chain is contributing to a rise in energy consumption and carbon dioxide production, has led to the concept of food miles – the distance that food travels from where it was produced to where it was consumed. Local food production and local growers markets are also on the rise – in part driven by the desire to have fresher food that has lost less of its nutrients due to long travel times and cold storage.

The Reality – is that the majority of the energy consumed and carbon dioxide produced in the total food chain is produced by the consumer in cooking the food and driving to buy it

While one response is to feel relatively powerless against the perceived “monster of globalisation” for threatening our sustainability, it turns out that our intuitive analysis of the situation is in many cases simply wrong.

The fact is, that in the case of food that we buy and cook at home, we the people are responsible for the largest use of energy and production of carbon dioxide in the total food supply chain.

For some reason when most of us think about the energy used and carbon dioxide produced with food only think about it in terms of the food we buy in the shops – we forget about the energy that we use to get to and from the shops to buy the food, the energy we use when we cook the food (and wash the dishes) and the energy used in disposing the waste.

When we add these energy consuming stages into the equation to get a full “seed to waste life cycle analysis” it turns out that the major energy consuming steps in the chain are created by us driving to buy the food and cooking the food. And of these two cooking takes up the most energy. And this analysis excludes the energy cost of washing the dishes.

You can see this represented graphically in two charts I found on the internet that measure the total carbon footprint / energy consumption for potatoes and broccoli in the UK.

For those of you who aren’t that good with graphs, the vertical bars in each graph measure the total energy used / carbon emitted to deliver one kilogram of potatoes and broccoli to the plate at home. The different energy consuming steps in this process are represented by the different colours – the hights of each colour represents the amount of energy used in that stage.

As you can see if the case of potatoes, approximately 11 mega joules (M J) of energy is consumed getting a kilogram of potatoes to a cooked state. And when you look at the light blue part of the bar you can see that just over 4 M J – about 37 percent – is used by us processing the potato at home. And this excludes the cost of driving to buy the potatoes.

In the case of broccoli – the graph compares broccoli sourced from Spain and the UK. The vertical bars measure the amount of carbon dioxide produced in the chain and the light green bars – the biggest in all cases – represent the energy used at home. This varies from around 50 to 60 percent of the total carbon dioxide.

The bottom line is that you can save more energy and carbon dioxide emissions by boiling your potatoes with the lid on the pot than by buying local produce.

In terms of transport economics the car is the most energy intensive form of oil powered transport. A large ship can carry one ton of food 8oo miles on a gallon of fuel. In comparison a train can move the same ton 60 miles, a truck 20 miles and a car 10 miles. When you see these statistics it is easy to see why the cat of driving to the shops to buy food is a relatively energy intensive part of the food chain.

I wonder how many more times this is going to be repeated in the near to mid term future?

It doesn’t take a genius to observe that many firms have been doing exactly what Toyota did – and probably even more so.

M&A has been the order of the day method for fast growth for many firms. Cheap money, competition, short term incentives and pushy investment banks have surely driven firms to create for themselves even bigger integration problems that those faced by Toyota.

In addition many of these firms have been reducing head counts and skimping on repairs and maintenance to boost short term returns. There simply have not been enough people on the ground with enough time and experience to make good decisions.

So as interest rates rise, sales stagnate or decline as consumers continue to stay away because of job cuts or fears of them, it is likely that we will see many more Toyota excuses in the future – we grew to fast.

And the same could be said for the human species and the global economy. But then this is a whole different ball game. Infinite growth on a finite planet is not only impossible but potentially suicidal – but with the majority voting for the political party promising the fastest and largest growth we will only have ourselves to blame.

Democracy and Capitalism share a common trait that is turning them into a problem and a threat to society. And the common thread is their short term focus which itself is a function of the prevailing world-view and the systems, laws and institutions that represent it.

This short term perspective allows both politicians, banks and other corporations to profit in the short term by “legally” stealing from the future. The losers are the general public.

If you wonder why Governments around the world have been bailing out banks rather than bailing out tax payers the relationship between Goldman Sachs and the Greek government is a good case study.

In 2001 Goldman is purported to have made a $300m profit on a deal it structured for the the Greek Government that allowed it to legally side step European Union rules on debt and deficit ratios. And as late as November 2009 a team from Goldman apparently arrived in Athens with another similar deal.

Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies encapsulates this succinctly – “Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it”

Where does this leave the average citizen? Neo-classical economists are in denial of the fact that economic growth is dependant of new debt rising faster than GDP. They are even in denial of the role that credit plays in economic growth.

With the general public and business at debt saturation levels the reality of the bankruptcy of the the capitalist model and many states has been hidden temporarily by governments who have taken up the role of providing the new debt required for economic growth. This is simply putting of the day of reckoning and setting us up for an even harder landing.

And you probably don’t have to guess to hard to work out that their accomplices that are facilitating this – and making big bonuses for doing it – are none other than the banks.

It is no wonder that the Tea baggers in the USA are a growing movement. I expect that similar movements will gain is strength across the world as the economic situation inevitably declines. The public is losing trust in its politicians – democracy is under threat.

In today’s online Economist there is an article titled “Analysis Catalysis – Designers think that they can teach MBA’s and philanthropists a thing or two”.

While design or systems thinkers could try to teach MBA’s and philanthropists a thing or two it is unlikely that they will learn or act on it.

Why?

Well, why do we still have so many M&A’s when research shows that more than half of them destroy value? Could it be that the incentives for both CEO’s and Investment bankers reward this sort of short term activity irrespective of its long term efficacy?

On Balance research shows that M&A destroys Value more than it creates it

There is little to no recognition of the inverse relationship between efficiency and resilience. As a result we run down our resilience and destroy our future prospects for short term efficiency gains. And that is what people go to business school to learn how to do – how to extract short term gains out of the system given the prevailing rules. In addition an MBA provides a badge that proves that they are compliant “in-the-box” thinkers that know these rules that define the box.

Systems thinking only really works when we factor in the unmeasured relationships and linkages between things that reductive analysis can’t objectively measure or ignores because it isn’t part of the prevailing “rule system”.

Systems or design thinking is therefore not only a qualitatively more complex and integrative way of seeing the world that of the dominant reductive scientific paradigm – but it also has neural correlates – the brain is wired differently. The neurons have more connections with each other.

Using the Keirsey interpretation of Myers Briggs Type Indicators for example, Designers are “perceptive and Intuitive” types (ENTP or INTPs) who are comfortable with uncertainty and complexity . People who do MBA’s are more likely to be “judgement and intuitive (ENTJ or INTJ) or sensory types (ENSJ)“.

Systems thinkers are relative misfits in our modern world. Their world view is too complex and integrative to be valued by our dominant reductive measurement systems. While they might be able to come up with ways to save humanity from itself, these ideas will wither until society comes up with feedback systems that include the “hidden” linkages and support that the enlightenment world view is ignoring or destroying.

The Economist wrote a great piece titled “How to Change the System – in praise of Russ Ackoff” on the 3rd November 2009.

One of Russell’s key insights is that our schooling system – with its focus on avoiding mistakes – ensures that we minimise our chances of learning and being creative. After all we can’t learn from repeating what we already know. We learn from mistakes. A person or system that avoids making mistakes avoids learning.

The thing about data is that it can made to say what ever you want it to say. A few weeks ago I read a quote to the effect – statistics is boring science fiction. It appealed to my sense of humour.

A few weeks ago I was looking through the latest report on Global Finance by the McKinsey Global Institute.- Mapping Global capital markets (the 5th edition).

In this report they present a concept they call the “Map of Global Financial Depth”. Basically it is plot of per capita GDP of various countries versus the value of all the finance that was required to generate these GDPs (as a percentage of the GDP).

As their graphic indicates there appears to be a trend which they have called financial depth – a mark of sophistication and modernity.

In essence, the data appears to be saying that countries with high per capita GDP can only achieve this with high financial depth. The very way that the graphic is presented, with a positive trend line that starts to increase vertically at the end, equated with a “mature” market, suggests that high “financial depth” is something to aspire to.

But hang on a moment. This data is saying something else too. It is saying that there are diminishing marginal economic returns.

While Indonesian’s manage to generate one dollar of economic output with one dollar of finance for an annual per capita income of about $6.000 and the Czech’s generate $25,000 using $1.50 of finance to generate every dollar, modern economies require $4.50 of finance to generate every dollar of income.

Have a look at this data presented in a slightly different format and for one country – the USA – over an extended time period. The reality of the diminishing marginal productivity of capital is very clear – moreover it is trending “downwards” rather the Mckinsey “upwards ” chart. And, if you take the liberty of projecting the trend line over time we might find that as soon as 2014 we are in a position where additional capital actual starts to destroy the economy!!

Diminishing marginal productivity of debt - usa

The USA economy could start start shrinking as early as 2014

And the problem with this is that it was this phenomenon that caused the collapse of 24 complex societies in the past. Joseph Tainter studied the development and subsequent collapse of 24 complex societies and came to the conclusion that as they became more complex they required an increasing amount of energy to run. Unfortunately he noticed that in each case, there was a diminishing marginal energy return As the complexity of each society increased problems arose that required solutions that were increasingly complex and increasingly expensive . At the point where the energy return on the energy invested in new solutions dropped below zero the society collapsed.

The key driver of human progress has been our capacity to harness energy. For example, some estimates suggest that our current modern western lifestyle requires the equivalent of 140 slaves per person – the rate for the USA today is around 300. We have only managed to achieve this through cheap, non-renewable, fossil fuels. It is no coincidence that the industrial revolution and our capacity to harness coal as an effective energy source occur at the same time.

Where will this energy come from in the future?

My take on this data is that it indicates how we are, and have been, “consuming our future” in an unsustainable way.

Free-market capitalism may have finally collapsed. The question of how this is about to play out in global society is unclear but I am expecting substantial societal collapse as a consequence.

Anyone who believes that governments will be able to rescue the world from a depression has not understood the economics and the psychology of the situation.

For me cloud computing looks like another securitisation folly. And new research out of the University of Melbourne that shows that the current high speed broadband growth is unsustainable makes me think I am on the right track.

To date all I have heard is the positive side of the cloud computing story.

The main argument is that Cloud computing is going to cost us less because of centralisation. For example when we run software as a service, instead of as individual programs on our computers, we will no longer have to worry about the costs involved with updating the software. It will all happen centrally. Moreover we will be able to share servers with others – the old economies of scale argument.

While I accept these arguments I disbelieve the thesis that cloud computing will be cheaper in the “long run” and when all “externalities” are included.

Cloud computing involves an evolutionary step – evolution implies an increase in complexity and increased complexity costs more. The fact that it appears to be costing less tells me that the people who are adding up the costs have either done their sums incorrectly or they have excluded some costs.

So what costs could they have excluded?

Let me take a guess. I reckon that as cloud computing takes off, we will suddenly see costs increasing faster than people expected. There will also be additional costs that they never thought about. And finally, they have excluded the costs of fixing the problem if, and when, there is a big collapse.

Cloud computing is like securitisation in that it increases vulnerability and risk to the recipient – it doesn’t reduce it. If something goes wrong in the cloud, everyone connected to that cloud goes down. System resilience declines as centralisation increases. And something like a collapse of a computer system will harm more than just the isolated computer system – as computers become more embedded in everyday processes the potential for an “isolated” computer crash to have an impact on systems that were perceived to be “unrelated” increases.

I wonder if security costs have been considered effectivily. My thoughts are that as the volume of traffic in the “cloud” increases it will become increasingly vulnerable to being corrupted by a virus. This is especially true because of the “virtualisation” that much of the cloud is based on. With information flowing in and out of clouds from everywhere, there will have to be some virus check on the data . My intuition tells me that the relationship between this cost and traffic volume will be non linear and that for this reason costs will end up much higher than predicted.

Has the analysis included all the direct and indirect infrastructure that will be required to make cloud computing a reality or has this been takes as pre-existing? It looks like their may have been some false assumptions made about the ability of the existing infrastructure to deliver the bandwidth required for cloud computing. Research by scientists at the University of Melbourne say that the growth of the high speed broadband, on which the whole of cloud computing us dependant, is unsustainable. The only way for it to work is if more money is put into the infrastructure and use more energy.

This research, which shows that the growth in demand for high speed broadband services could make services slower, is to be presented at a Symposium on Sustainability and the Internet this week.

The university’s Dr Kerry Hinton says it shows the growth of the internet is not sustainable.

“We’ll find that the network will actually grind to a halt, the reason being that the machines at the core of the internet that actually route the packets through the network, they can chew up more and more energy,” he said.

“We’re getting to the stage that the amount of energy they consume is so great that we can’t get the power into them and we can’t get the power out of these machines.

“If we plan carefully and start thinking ahead and making sure the technology we use is becoming more energy efficient, so we make the internet more sustainable, then we should be okay.

“But the key message is if we don’t plan ahead and start thinking what does this mean, and we continually roll out more and more services through the internet, that’s when the trouble will start.”

Beware of gods bearing false promises. The moral of the story is that if something is more complex it will cost more. Joseph Tainter did a study of the collapse of 24 complex societies. These societies all collapsed for the same reason. They all reached a point where their demand for energy outstripped their capacity to supply it. We forget that economic progress is a function of per capita energy use. Every time these societies hit a new problem they solved it with a solution that was more complex that the problem. This drove the energy demand up.

How sustainable is our economic infrastructure? We have built a whole system on the basis of cheap energy from fossil fuels. What will happen when the price of energy increases? How much of what we do will be sustainable or even the best way to do something?

The Economist Magazine has an article titled Sub-prime with the subtitle: Greener thinking for the poorer cities.

I like the title “sub-prime” but for a different reason. And I would use the subtitle – “Shuffling deck chairs on the Titanic”.

The article talks about World Habitat Day which was marked by a prize rewarding smart urban planning. Habit is a United Nations’ organisation tasked with improving our urban fabric. In the next 20 years 2 billion people are going to move into cities from the land. That is equivalent to almost one third of the current global population.

“It’s the equivalent of adding a Pittsburgh, Manchester, or a Hanoi to the planet every week,” says Michael Cohen of the New School in New York, one of a group of urbanisation experts gathered at Habitat’s headquarters in Nairobi recently to help the agency map out a plan to raise public awareness of a potentially grim future.

The group apparently had a problem agreeing what Habitat’s tentative campaign slogan of “sustainable urbanisation” meant. Apparently, one thought is to emphasise the positives of cities. They can be the solution instead of the end game. Properly managed they can slash emissions, grow knowledge and creativity, and haul billions of poor out of poverty. Really – raising people out of poverty? For how long? That is what the sub-prime housing market in the USA was supposed to do and for a while it looked like it was working – housing prices could keep on increasing for ever couldn’t they! House price multiples of 9 times median earnings were suddenly sustainable in the long term even though historically the sustainable ratio was more like three.

When is humanity really going to wake up to the fact that it is running up an ecological debt – and probably has been doing so since the 1980’s.

“Sustainable cities?” – really. 1984 double speak – hire the spin doctor and create a music clip for MTV, recruit a Hollywood star and everyone will live happily ever after?.

It seems like these guys at the UN are smart enough to be able to identify the underlying facts about the nature of the demand of cities on our ecological support system but then fail to take the next step and identify the consequences.

From a big picture perspective, these new cities are the equivalent of the new housing stock created by the sub-prime lending in the USA. They are adding to an unsustainable debt burden to the planet that will eventually burst.

Just like the sub-prime housing debt market in the USA was the straw the broke the camel’s back of an unsustainable global financial debt, the sub-prime ecological debt market, created by new cities, will be the straw the breaks the back of an unsustainable global ecological debt. People moving from the land to the cities will at least triple their energy consumption

The earth is heading for it’s Titanic iceberg moment. This time we have the data. We don’t need rocket science to work this one out. The mathematics is very simple.

Consider this question. Imagine there is a pond with lilies growing in it. The surface area of the pond covered by the lilies doubles each day. The pond starts empty and is fully covered by the lilies on day 30. On what day is the pond half covered by lilies? The answer is day 29. In other words right up until day 29 everything looks fine and we still have a lot of room to play with. Then it all goes wrong very quickly.

We are not dealing with linear issues – moreover we don’t just have the one exponential issue – we have multiple exponential growth factors combining with each other like population growth, energy consumption and per capita consumption on non renewable resources. We might well ask ourselves – if we use the lily in the pond model, what day are we on?

The powers that be – like this example of the UN – are smart enough to get the basic numbers right, this is not the issue. It is what happens to those numbers – how they are interpreted – that is the issue. Analysis will show that the global and national institutions that run the show have a world view that was shaped by past experience. This is normal. The problem though is that what we called “progress” and successful in the past, in a planet where the global human population was much smaller and only a small proportion of that enjoyed the benefits of that progress and success, has now turned into a problem which threatens our survival in this new environment.

As Einstein said – you can’t solve a problem with the same level of thinking that caused it. Progressive, enlightenment thinking, reductive science, competition, free-markets, democracy – these are belong to the world view or thinking that delivered us this personal freedom and economic growth that we take for granted and are even today fighting for.

I don’t want to go back to an authoritarian or war lord past or live in a cave. So what is to be done?

Clearly we are finding it difficult to come to terms with the fact that our world view is inadequate. The first step is to acknowledge this and change our language. We need to stop calling free-markets a success and stop deluding ourselves that the growth of cities can be sustainable.